I am won­der­ing if you have ever seri­ous­ly con­sid­ered issuance of Gisel­lian cur­ren­cy for coun­tries fac­ing unplayable debt (all of them, as far as I know).

The scheme I am imag­in­ing would have these govts pay­ing off bonds due with G‑currency. Bond­hold­ers would then, ASAP, spend it on real items in the econ­o­my, where it would even­tu­al­ly end up as wages, where work­ers would spend it, ASAP, on tax­es and con­sumer goods.

The demur­rage, say 12%/year (= 12 x 1% stamps) would give this cur­ren­cy an annu­al veloc­i­ty of at least 12 since any hold­er of the cur­ren­cy would want to spend it before each month-end tax stamp would be due.

I recent­ly watched the fed­er­al trea­sur­er, Scott Mor­ri­son, proud­ly pro­claim that Aus­tralia was in “sur­pris­ing­ly good shape”. Indeed, Aus­tralia has just snatched the world record from the Nether­lands, achiev­ing its 104th quar­ter of growth with­out a reces­sion, mak­ing this achieve­ment the longest streak for any OECD coun­try since 1970.

Aus­tralian GDP growth has been trend­ing down for over forty years
Source: Trad­ing Eco­nom­ics, ABS

I was pret­ty shocked at the com­pla­cen­cy, because after twen­ty six years of eco­nom­ic expan­sion, the coun­try has very lit­tle to show for it.

I have recent­ly estab­lished a Patre­on site https://www.patreon.com/ProfSteveKeen, where peo­ple can sup­port my research and advo­ca­cy work with dona­tions start­ing at $1/month. That is now where I will engage in con­ver­sa­tion in response to posts. So if any­one here wants to con­tin­ue a dia­logue with me and oth­ers, please sign up there.

This site was flood­ed by a large num­ber of spam users at the same time as I became unable to main­tain my own role in dis­cus­sions here, since I am just too damn busy in Lon­don. This has caused the site to be sus­pend­ed three times by its ISP for per­for­mance issues. One more time and the account will be banned. I have there­fore decid­ed to delete all users on this site, bar those who have made posts (which is a hand­ful of indi­vid­u­als of course).

I’m tak­ing part in a debate on one of the major top­ics in this year’s elec­tion, Brex­it, on May 31st at 7.30pm at Can­ham, 40 Sheen Lane, Lon­don SW148LW. The oth­er speak­ers are Frances Cop­po­la, and Angus Arm­strong.

Frances Cop­po­la is an eco­nom­ic com­men­ta­tor in print and fre­quent­ly on the BBC.

Angus Arm­strong is direc­tor of macro-eco­nom­ics at one of the top research insti­tu­tions, the Nation­al Insti­tute of Eco­nom­ic and Social Research found­ed in 1938.

In 2008, con­ven­tion­al eco­nom­ics led us blind­fold­ed into the great­est eco­nom­ic cri­sis since the Great Depres­sion. Almost a decade lat­er, with the glob­al econ­o­my wal­low­ing in low growth that they can’t explain, main­stream econ­o­mists are reluc­tant­ly com­ing to realise that their mod­els are use­less for under­stand­ing the real world.

As I explain in this video, gov­ern­ment attempts to turn Uni­ver­si­ty entrance into a mar­ket­place have had the unin­tend­ed side-effect of under­min­ing plu­ral­ist eco­nom­ics. The UK gov­ern­ment has removed con­trols on the num­ber of places that Uni­ver­si­ties can offer in first year cours­es, and as a result there has been an increase in human­i­ties places offered by high­ly ranked Uni­ver­si­ties. Final year high school stu­dents have flocked to these Uni­ver­si­ties, and enrol­ments at low­er-ranked Uni­ver­si­ties have fall­en sub­stan­tial­ly.

A new organ­i­sa­tion called NEKS (for “New Eco­nom­ic Knowl­edge Ser­vices”, see www.neks.ltd) is hold­ing its inau­gur­al con­fer­ence on the eco­nom­ics of infra­struc­ture In West­min­ster on Tues­day Jan­u­ary 24th, and you should attend.

Why NEKS, and why Infra­struc­ture? The eco­nom­ic impor­tance of infra­struc­ture is obvi­ous, but the actu­al per­for­mance of infra­struc­ture often dif­fers rad­i­cal­ly from what is pre­dict­ed when it is being planned. Three forms of delu­sion make many infra­struc­ture projects far less ben­e­fi­cial than expect­ed by their pro­po­nents: the com­plex­i­ty of exe­cu­tion is under­es­ti­mat­ed, the ben­e­fits are over­es­ti­mat­ed, and ben­e­fits are also cal­cu­lat­ed poor­ly using dodgy eco­nom­ic the­o­ry.

This is a talk I gave in Ams­ter­dam to launch the Ams­ter­dam Rethink­ing Eco­nom­ics cri­tique of the cur­rent state of eco­nom­ics “edu­ca­tion” in the Nether­lands. The text of my slides is repro­duced below.

Video overview

Debunking Economics II

Disclaimer

This site does not give personal financial advice. The focus of this blog is economic analysis, and how you interpret this with respect to your own financial decisions is entirely up to you.

Steve Keen, Debtwatch, and any employees or associates will not be held liable for any losses resulting from decisions taken by any individual or entity as a consequence of reading materials on this blog.

Membership or sponsorship of this blog does not constitute purchasing any product service apart from those listed in the membership and sponsorship conditions.